Commodities Market: Technical Outlook
September 20, 2011
R2=1849.94
R1=1816.26
PP=1793.30
S1=1759.61
S2=1736.66
Technical
Gold lost 28$ on Monday to close 1779.92$. A Bearish formation has occurred which is a bearish sign. Moreover, the 15-DMA has taken a downturn indicating that the current downward trend is likely to continue with the initial target of 1755$ (bowlinger band). Any further fall below this level will target the 1740$ and1725$. The MACD has maintained its downward trend supporting the above view.I therefore suggest investors to continue with ‘Sell on Strength’ strategy, keeping stoploss above yesterday’s high of 1828$. The support and resistance are present at 1762.12$ and 1806.24$, respectively.
Fundamental
Gold edged higher on Tuesday,supported by rising safe-haven interest after a Standard and Poor's downgrade of Italy's credit rating heightened worries about euro zone's debt crisis. Investors are watching a policy meeting by the U.S. Federal Reserve on Tuesday and Wednesday, to see whether the central bank will deploy more easing measures to spur economic growth. Chinese gold demand could rise 10 percent, or around 70 tonnes, this year as consumers choose the metal as a form of wealth protection, the World Gold Council said on Monday.
By
M.Zohaib Gadit
Forex Trading Consultant
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